Atlantic Council
GLOBAL ENERGY CENTER
ISSUE BRIEF
The Atlantic Council Global
Energy Center works to
address the energy-related
geopolitical, environmental,
security, and economic
challenges of a world in
transition. The Center provides
cutting-edge analysis for
public and private stakeholder
groups across government,
industry and civil society and
convenes these groups to
develop recommendations and
implement solutions.
The America First
Energy Plan
Renewing the Confidence of
American Energy Producers
AUGUST 2017 SARA VAKHSHOURI
U
S energy policy is poised for a drastic reversal. The Clean Power
Plan is giving way to the America First Energy Plan, as President
Donald Trump take steps to unwind Barack Obamaera clean
energy initiatives, strip US energy policy of environmental and
climate concerns, and focus solely on two priorities: producing low-cost
energy and creating American jobs.
President Trump has pledged to reignite the US coal industry and expand
domestic fossil fuel production. His administration and congressional
allies plan to roll back regulations, open hundreds of millions of acres of
federal land to coal, oil, and gas exploration, and cut federal funding for
climate and environmental programs.
However, while the president has thus far taken steps to dismantle
environmental regulations, reduce climate funding, and exit the Paris
climate agreement, the real question is whether these moves will lead
to a boom in domestic fossil fuel production. When it comes to oil and
gas, production has been increasing (with the exception of 2016) since
2008, while domestic coal production (and consumption) has largely
trended in the opposite direction.
Republican control of the executive and legislative branches could pave
the way for Trump to implement his America First Energy Plan, which
many fossil fuel producers have responded favorably to. However,
despite Republican control of the executive and legislative branches,
President Trump must surmount substantial obstacles to make good
on his promises of regulatory rollback heralding in a coal revival. The
headwinds against coal have been primarily economic, rather than
regulatory, and supporting coal could come at the expense of natural
gascontradicting both the presidents own plan to boost natural gas
and Republican free market principles.
Thus, it is not yet clear to what extent President Trump can overcome
market forces and align seemingly contradictory aims to achieve his
energy priorities.
 ISSU E B RIEF The America First Energy Plan
An America First Energy Plan: Less
Regulation, More Drilling
President Donald Trump has signaled his intention
to change US energy policy and has thus far taken
several key actions to this end. During Barack Obamas
presidency, the White House emphasized developing
renewable energy and combatting climate change.
Conversely, the Trump administrations stated focus
is on the extraction of low-cost energy resourcesin
other words, fossil fuels.
President Trumps America First Energy Plan aims to
reduce regulations on domestic fossil fuel extraction
and purports to create jobs by expanding oil, gas, and
coal production.
Trumps America First Energy Plan1 is rooted in
campaign promises and has three major components:
1. Expand the extraction of low-cost US fossil fuels to
create jobs and achieve energy independence;
2. Revive the declining coal industry in the United
States;
3. Undo the Obama administrations climate policies
and end the Climate Action Plan.
Summarizing the plan at the January 2017 Republican
retreat in Philadelphia, Pennsylvania, Trump
proclaimed, Well unleash the full power of American
energy, ending the job-killing restrictions on shale oil,
natural gas and clean, beautiful coal . . . And were
going to put our coal miners back to work.2
The core tenets of President Trumps plan are hardly
new. Prioritizing domestic fossil fuel production and
low energy prices for consumers has long been the
foundation for Republican energy policy, in sharp
contrast to the environmental and climate priorities
of Democrats. The presidents plan preserves the
traditional focuses of the Republican energy goals.
However, Trump takes these traditional priorities
further. In comparison to President George W.
Bushs energy policy, President Trump takes a much
stronger, even contemptuous, stance against climate
1 President Donald J. Trump, An America First Energy Plan, The
White House, https://www.whitehouse.gov/america-first-energy.
2 Donald Trump, Speech Delivered at the Republican Party Phila-
delphia Retreat via CNN, January 26, 2017, http://www.cnn.com/
TRANSCRIPTS/1701/26/wolf.02.html.
2 ATLANTIC COUNCIL
change policies, which he and his team characterize
as job killers. The presidents stance against climate
change policies even goes further than many oil and
gas producers. ExxonMobil and ConocoPhillips, for
example, have reiterated their support for the Paris
climate agreement, 3 which the president announced
the United States would exit in a June 1 press conference
in the White House Rose Garden.
The purported aim of President Trumps energy policy
is to increase domestic fossil fuelnamely oil, gas, and
coalextraction and that of other low-cost energy
resources. The America First Energy Plan released by
the White House states: The Trump Administration
is committed to energy policies that lower costs for
hardworking Americans and maximize the use of
American resources, freeing us from dependence on
foreign oil.4
To accomplish these objectives, the president has
promised to roll back regulations on oil, gas, and coal,
shift funding away from renewable resources and
climate programs, and approve new energy production
and export projects.
In February, Trump signed a bill undoing financial
disclosure rules on energy companies. 5 In March, Trump
issued an executive order to stop the implementation
of the Clean Power Plan.6 In June, he announced his
intention to withdraw the United States from the Paris
climate agreement, although the exact mechanics of
withdrawal remain unclear. While an effort to roll back
regulation of methane emissions faltered in Congress,
the Interior Departments Bureau of Land Management
announced it would delay implementation of methane
regulations on federal land while the Environmental
Protection Agency (EPA) announced it would delay
implementation of a rule on methane leaks for two
years.7
3 Alex Nussbaum and Joe Carroll, Exxon and Conoco Reiterate
Support for Paris Climate Deal, Bloomberg, May 31, 2017, https://
www.bloomberg.com/news/articles/2017-05-31/exxon-conoco-
back-paris-climate-deal-as-trump-weighs-pact-exit.
4 President Trump, An America First Energy Plan.
5 Devin Henry, Trump Signs Bill Undoing Obamas Coal Mining
Rule, The Hill, February 16, 2017, http://thehill.com/policy/ener-
gy-environment/319938-trump-signs-bill-undoing-obama-coal-
mining-rule.
6 Coral Davenport and Alissa Rubin, Trump Signs Executive Order
Unwinding Obama Climate Policies, New York Times, March 28,
2017, https://www.nytimes.com/2017/03/28/climate/trump-exec-
utive-order-climate-change.html?_r=0.
7 Juliet Eilperin, Trump Administration Delays Rules Limiting
America First Energy Plan
US Energy Policy in the Trump Era
ISSU E B RIEF The America First Energy Plan
Texas
Pennsylvanya
Overview Natural Gas
WA ND
MT
MN
me Others
WI
OR
ID
WY
SD
VT Oklahoma 6%
US energy policy is poised
nh
6%
NY
6% IA ma
Natural gas output in 2015
NE
PA
for a drastic reversal; 9%
IL IN RI
reached a record high of NV
OH 18% ct 35%

27 tcf
CO nj
UT

The Clean Power Plan is giving way

KS MO WV DE
US Natural
KY VA MD
DC
Gas Output
to the America First Energy Plan
CA
OK TN NC
9% AR 2015
18%
AZ NM

65%
SC
Wyoming
AL
MS GA

of US natural gas TX LA
The core of President Trumps output of 2015 was in 26% 6%
energy policy is to increase domestic 26%
Texas, Pennsylvania,
FL TRUMP
AK
All of these top-producing Lousiana
extraction of fossil fuels; Oklahoma, Wyoming,
oil, gas, and coal. states backed Trump
and Louisiana HI
in 2016 election

Oklahoma
Oil WA
MT
ND
12% Alaska
President Trump promises to unwind
MN

Obama-era clean energy

me
California Others
5%
SD WI
OR
initiatives and focus on two priorities:
ID
WY
VT
nh 6%
US oil production
NY

producing low cost energy 9,415 IA ma

6%
fell from 2015
NE
PA
creating American jobs. to 2016 from NV
IL IN OH RI
ct
CO
8,874
nj
35%
UT
9,415 mb/d KS MO WV DE
12%
KY VA MD
US Crude
to 8,874 mb/d CA
DC
North Oil Output
The Plan 6% OK AR
TN NC
Dakota 2015
AZ NM 5% SC
AL
MS GA
LA
TX
The core of Oil output surged from
2008 to 2015, especially AK
37%
FL TRUMP 37%
America First Energy Plan is to in Texas, North Dakota, 5% Four of top oil-producing states
are traditional republican leaning
Texas
Oklahoma
areas and voted for Trump.
HI

Expand the extraction of low cost

US fossil fuels to create jobs and
achieve energy independence
Coal
WA ND
MT
MN Illinois
me Pennsylvania
SD WI
OR
Revive the declining ID
WY VT
6% Others
NY nh

coal industry in US Coal has been 40% IA ma Kentucky 6%

NE
declining steadily IL IN
PA RI
since 2008 primarily
OH 6% 29%
NV
CO 6% ct
nj 8%
UT KS WV West
due to the growth of MO
KY 11% VA
DE
MD
cheap natural supplies 8% DC Virginia US
Unwind the Obama-era clean energy CA TN 11% Coal Output

70%
OK NC
AR
& climate policies, and end the AZ NM
SC 2015
Climate Action Plan. of US coal production MS
AL
GA

comes from Wyoming, TX

LA

West Virginia, Kentucky,

FL
Pennsylvania, AK TRUMP
All of these top-producing 40%
and Illinois. states except for Illinois
HI
went for Trump Wyoming

In addition to the rollback or delay of regulations, commerce department issued a statement expressing
the Trump administration is also eager to open more support for striking deals with Chinese energy buyers. In
federal lands to drilling. In April, Trump signed the June, Secretary of Energy Rick Perry traveled to Beijing
America-First Offshore Energy Strategy, reversing where he promoted US LNG.10 While the United States
President Obamas decision to withdraw millions of currently supplies 7 percent of Chinese LNG imports,
acres of federal offshore land for development. 8 several major Chinese companies are considering
long-term contracts to import more US LNG.11 To meet
In conjunction with expanding production, the Trump projected global demand, six LNG export terminals
administration is strongly promoting an increase in are slated to open within the next several years. The
liquefied natural gas (LNG) exports. With its emphasis Trump administration is likely to take pains to ensure
on reducing trade deficits, the administration sees that the licensing process proceeds as smoothly as
sales of US LNG as an element of its trade policy.9 Asia possible.12 However, low oil prices are a hurdle for US
looms large in the US LNG export strategy. In May, the LNG producers, complicating their ability to compete
and match the prices offered by other major producers
Methane Emissions, Washington Post, June 14, 2017, https:// like Qatar. US LNG contract and spot prices in Asia and
www.washingtonpost.com/politics/trump-administration-de-
lays-rules-limiting-methane-emissions/2017/06/14/0e7d50fa-512
b-11e7-be25-3a519335381c_story.html?utm_term=.dc53c27da71b.
8 Juliet Eilperin, Trump Signs Executive Order to Expand Drill- 10 Ibid.
ing Off Americas Coasts: Were Opening It Up, Washington 11 Jude Clemente, US Liquefied Natural Gas to China Is a
Post, April 28, 2017, https://www.washingtonpost.com/news/ Game-Changer, Forbes, May 25, 2017, https://www.forbes.com/
energy-environment/wp/2017/04/28/trump-signs-executive-or- sites/judeclemente/2017/05/25/u-s-liquefied-natural-gas-to-chi-
der-to-expand-offshore-drilling-and-analyze-marine-sanctuar- na-is-a-game-changer/#24c541b2671a.
ies-oil-and-gas-potential/?utm_term=.b94a8fe36d3b. 12 John Sicilano, Trump LNG Export Policy Sparks Clash between
9 Barney Jopson, Demetri Sevastopulo, and Ed Crooks, Big Energy Users and Gas Industry, Washington Examiner, July
Trump Looks to Lift LNG Exports in US Trade Shift, Fi- 3, 2017, http://www.washingtonexaminer.com/trump-lng-export-
nancial Times, June 22, 2017, https://www.ft.com/content/ policy-sparks-clash-between-big-energy-users-and-gas-industry/
c5c1958c-5761-11e7-80b6-9bfa4c1f83d2?mhq5j=e3. article/2627603.

ATLANTIC COUNCIL 3
 ISSU E B RIEF The America First Energy Plan
Europe are currently much higher than the oil-indexed
prices offered by Qatar.
Thus, despite the complex interagency negotiations
and time-consuming, legally uncertain processes
required to undo or reverse regulations, fossil fuel
producers are expecting more regulatory relief to
come and have responded eagerly to promises of more
acreage for production and less regulation. However, it
remains to be seen just how the administration will walk
back some of the existing regulations it has promised
to undo, how long this will take, and how soon auctions
or permitting for drilling in newly opened areas could
occur.
An Oil and Gas Resurgence
The beginning of Trumps presidency has thus far
coincided with what could be the beginnings of a
resurgencestarted in 2016of domestic oil and gas
production following a downturn due to low oil prices.
US fossil fuel production is rising and the number of
operating rigs for both oil and gas in the United States
has increased significantly since 2016.
Major investors in US shale have significantly increased
their 2017 capital-spending budgets. In his first public
appearance, Darren Woods, Secretary of State Rex
Tillersons successor as chairman and chief executive
officer (CEO) of ExxonMobil, announced that the
company would allocate 50 percent of its worldwide
drilling budget to US shale.13 Mr. Woods anticipates
that US shale output will grow at an average rate of 20
percent annually through 2025.14 Other shale investors
like Hess, Apache Group, Cabot Oil & Gas, and Whiting
Petroleum Corp. have all increased their 2017 capital-
spending and investment budgets.15
While market forces have largely driven increasing
upstream investment, Trumps inaugurationand
support for fossil fuelsmay have bolstered optimism
among some producers. Investment budgets began
rising prior to Trumps inauguration, but as Pioneer
Natural Resources CEO Timothy Dove stated at Platts
Global Crude Oil Summit in May, Trumps energy
13 Joe Carroll, Exxons New CEO Shifts Investments to Quick-Earn-
ing Shale Oil, Bloomberg, March 1, 2017, https://www.bloomberg.
com/news/articles/2017-03-01/exxon-sees-20-annual-growth-in-
u-s-shale-fields-through-2025.
14 Ibid.
15 See Table 1.
4 ATLANTIC COUNCIL
plan and relaxed EPA rules are helping the oil and gas
producer focus more on productive issues. 16
While this perspective is not universalmany oil
companies have downplayed the impact of reduced
regulations on their bottom lines to investorsmany
executives have publicly stated that regulatory relief
will improve their margins.17
In a written statement, ConocoPhillips noted that
Changing, excessive, overlapping, duplicative and
potentially conflicting regulations increase costs, cause
potential delays and negatively impact investment
decisions, with great cost to consumers of energy. 18
At the CERAWeek energy conference in March of this
year, Chevrons CEO John Watson added, We havent
seen 3 percent growth in the economy for eight years,
and I think part of the reason is that weve had a heavy
dose of regulation. 19
These statements are indicative of a sentiment among
some oil and gas producers that their outlook under
Trump might be more favorable than had Hillary
Clinton won the White House. Referring to Clintons
loss, John Dowd, an energy fund manager, stated I
believe the absence of a negative is a positive . . . The
market has been concerned with the sustainability of
fracking, and particularly to what extent it might have
been regulated into obscurity by a different election
outcome.20 With a president and Congress in support
of domestic fossil fuels and in opposition to many
environmental regulations, industry concerns with
regulations have eased substantially.
The factors driving this growth are, of course, multiple,
with rapid improvement of drilling technologies and
market conditions being the most important. The
Organization of the Petroleum Exporting Countries
(OPEC) production agreement forged in November
2016, effective as of January 2017 and extended in
May, suggests that after two years of volatility and low
prices, the market has finally seen some sort of control
over production. Even though the agreement was not
successful in causing significant price relief, it prevented
16 S&P Global Platts 10th Anniversary Global Crude Oil Summit,
London, May 11-12, 2017, attended by the author.
17 Richard Valdmanis, As Trump Targets Energy Rules, Oil Com-
panies Downplay Their Impact, Reuters, March 28, 2017, http://
www.reuters.com/article/us-usa-trump-oil-regulation-insight-
idUSKBN16U1A9.
18 Ibid.
19 Ibid.
20 Ibid.
 ISSU E B RIEF The America First Energy Plan

further price drops and shock in the market. The hope
is that lower oil prices will encourage demand growth,
and that this annual demand growth combined with
OPEC supply control could help the market balance
itself by 2018. Thus, the production agreement also
presents a significant potential opportunity for US oil
producers, although so far prices have remained soft,
as inventories have failed to decline.
The shale industry has also proven far more nimble
and responsive to short-term pricing than traditional
multibillion-dollar megaprojects that take decades
to develop, enabling shale producers to rapidly
respond to changing conditions. Shale has also grown
substantially more price resilient in recent years.
According to Pioneer Natural Resources Timothy
Dove, the breakeven price in the Permian is now at

Table 1. Capital Investment Budgets in 2016 and 2017 (billions of dollars)

Company Location 2016 2017 Comments

One-third of budget
Permian Basin; for shale
ExxonMobil 19.3 22
Bakken Formation One-half for shale in
2018
$700 million
investment in
Hess Corp. Bakken Formation 1.9 2.25
unconventional
resources

North Dakotas
Whiting Petroleum North Dakota .554 1.1
largest producer

Increased
Eagle Ford
investments in both
Cabot Oil & Gas Formation; Marcellus .325 0.65
Eagle Ford and
Formation
Marcellus

Permian Basin; $500 million for

Apache Corp. Alpine High Oil and 1.9 3.1 infrastructure in
Gas Field Alpine High Field

Sources: Ernest Scheyder, Exxon Doubling Permian Basin Holdings in US for Up to $6.6 Billion, Reuters, January 17, 2017, http://www.reuters.
com/article/us-exxon-mobil-deals-permian-idUSKBN15120F?il=0; Hess Increase Capital Budget by 15% for 2017, Hess Journal; Whiting Petro-
leum Nearly Doubles Its Capital Spending Budget, Reuters, February 21, 2017, http://www.reuters.com/article/us-whiting-petrol-results-idUSKB-
N1602L0; Jamison Cocklin, Cabot Oil & Gas Increases 2017 Spending on Firmer Commodity Prices, Natural Gas Intel, February 24, 2017, http://
www.naturalgasintel.com/articles/109535-cabot-oil-gas-increases-2017-spending-on-firmer-commodity-prices; Apache Sees Higher 2017 Bud-
get but Output Forecast Disappoints, Reuters, February 23, 2017, http://www.reuters.com/article/us-apachecorp-results-idUSKBN1621F2.

Table 2. US Oil and Gas Rig Count: April 2016 and April 2017

Rig Type April 2016 April 2017

Oil 343 688

Gas 88 167

Source: North American Rig Count, Baker Hughes, http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother.

ATLANTIC COUNCIL 5
 ISSU E B RIEF The America First Energy Plan
$20 per barrel,21 although the breakeven price for
shale varies widely, and the US average is closer to
$35 per barrel. Supporting his bullish stance towards
US shale, ExxonMobils Darren Woods also noted that
The shift from long to short is really a reflection of the
opportunity that has grown in the short-cycle business.
That part of the business isnt in discovery mode; its in
extraction mode.22 (Emphasis added.)
The presidents positions add a layer of support for
producers, on top of modestly (and haltingly) improving
market conditions and technological advancements.
An appreciable factor may be the psychological impact
of Trumps election. His vocal, rhetorical support of
fossil fuel production has baked profitable scenarios
in investors minds, contributing to the soaring oil and
gas investment budgets for 2017.
However, it is unclear whether relaxing regulations will
ultimately have a large impact on domestic oil and gas
production, which is largely responsive to price signals
and changes in global markets. Reducing regulations
and opening more land for drilling could raise US oil
and gas production. If producers capitalize on these
changes, it could usher in a supply surge, putting
downward pressure on oil and gas prices, assuming
there is no global supply interruption, which could
then lead to curtailed production under the new price
environment.
Reviving the Coal Industry: A Difficult
Challenge
The America First Energy Plan places special emphasis
on reviving Americas coal industry, which the White
House says has been hurting for too long.23 Trump has
taken several steps to reduce what he characterizes as
undue regulatory burden on the industry.
In February, Trump signed legislation that eliminated
restrictions on polluting waterways with coal mining
waste. 24 In March, he signed an executive order, which
he signed in the presence of coal miners who he told
he was putting back to work, essentially undoing the
Clean Power Plan. The Interior Department has also
proposed regulatory changes that would allow coal
exploration and production across 570 million acres of
21 S&P Global Platts 10th Anniversary Global Crude Oil Summit.
22 Carroll, Exxons New CEO.
23 President Trump, An America First Energy Plan.
24 Henry, Trump Signs Bill Undoing Obamas Coal Mining Rule.
6 ATLANTIC COUNCIL
federal land. 25 Despite these regulatory changes and
proposals, reigniting the coal industry at a time when
natural gas has been consistently out-competing coal
is not an easy task.
The US coal industry has been declining steadily since
2008, primarily due to the growing availability of
cheap natural gas used in power production, another
example of how the shale boom has substantially
reshaped the US energy portfolio. In 2016, natural gas
overtook coal as the largest source of US electricity
and power plant feedstock for the first time. 26 However,
while the coal industry has suffered years of falling
production, there is the potential for some modest
relief. The Energy Information Administration projects
US coal production to rise 8 percent in 2017, driven by
demand for US exports. 27 While this may be welcome
news to many US coal producers, it raises the question
of whether Trumps policies and rhetorical support for
coal or global demand will be the bigger determinant
of coals future.
Market forces, more than environmental regulations,
have primarily driven the decline of coal. American
power generation is moving away from coal because
gas has become cheaper, and clean coal has yet to be
proven economically viable. Electric companies and
consumers have benefited from cheap natural gas. It is
not economical to upgrade an older generation of coal
pants that emit high levels of mercury pollution to meet
federal requirements when plants could simply alternate
their feeding fuel. The capital cost of constructing and
operating a new coal power plant with 90 percent
carbon capture capability is vastly more expensive than
a similar plant that runs on natural gas. 28
To bring back coal, the Trump administration would
need to intervene in the market and introduce
incentives for electricity producers to use coal rather
than cheaper and cleaner natural gas to generate
25 Michael Shea, Trump Administration Rolls Back Mining Restric-
tions on Public Lands, Field and Stream, April 6, 2017, http://
www.fieldandstream.com/trump-administration-rolls-back-min-
ing-restrictions-on-public-lands.
26 What Is US Electricity Generation by Energy Source, US Energy
Information Administration, last updated April 18, 2017, https://
www.eia.gov/tools/faqs/faq.php?id=427&t=3.
27 US Energy Information Administration, Short-Term Energy Outlook,
June 2016, https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf, 2.
28 US Energy Information Administration, Capital Cost Estimates
for Utility Scale Electricity Generating Plants, November 2016,
https://www.eia.gov/analysis/studies/powerplants/capitalcost/
pdf/capcost_assumption.pdf, 7.
 ISSU E B RIEF The America First Energy Plan
Table 3. Power Plant Capital and Operating Costs
Type Capital Cost ($/kilowatt)
Coal 5084
Natural Gas 978
Uranium 5945
Biomass 4985
Wind 1877
Solar 2671
Source: US Energy Information Administration, Capital Cost Estimates for Utility Scale Electricity Generating Plants, November 2016, https://www.
eia.gov/analysis/studies/powerplants/capitalcost/pdf/capcost_assumption.pdf.
power. Interfering in the market is not only at odds with
Republican economic principles but also potentially
conflicts with Trumps other stated goal of expanding
natural gas production, another low-cost domestic
resource.
One potential, though uncertain, bright spot for
President Trumps vision may lie in metallurgical
coal. Unlike thermal coal used in power production,
metallurgical coal is used for steelmaking, and faces
less severe competitive constraints. 29 A mine in
Jennerstown, Pennsylvania, started under the Obama
administration, opened in June and is expected to
employ 70 people producing metallurgical coal. 30
While unlikely to fully offset declines in the thermal
coal industry, an uptick in metallurgical coal production
could provide a degree of modest relief for producers.
Exporting coal, rather than focusing on domestic
consumption, is another way the Trump administration
could encourage US coal production. Coal exports not
only would benefit the US economy and encourage
domestic production, but could be used as a diplomatic
tool. The recent agreement between energy companies
29 Timothy Gardner, Can Trump Make Coal Great Again? At Least
Some Companies Think So, Reuters, November 18, 2016, http://
www.reuters.com/article/us-usa-trump-coal-idUSKBN13D17J.
30 Reid Frazier, FACT CHECK: Is President Trump Correct That
Coal Mines Are Opening? NPR, June 2, 2017, http://www.npr.
org/2017/06/02/531255253/fact-check-is-president-trump-cor-
rect-that-coal-mines-are-opening.
ATLANTIC COUNCIL
Operation Cost ($/kilowatt-year)
70
11
100.28
110
39.7
23.4
in the United States and Ukraine is a perfect example
of how coal exports could be used to help attain US
foreign policy objectives. According to this agreement,
Xcoal Energy & Resources LLC, a Pennsylvania-based
coal company, will export seven hundred thousand
tons of thermal coal to Ukraine in the winter of 2017. 31
This coal will be used in a power plant run by Ukrainian
public joint stock company Centrenergo to generate
electricity. 32 Even though the distance between the
two countries will result in higher transportation costs,
which will be reflected in the final prices, these exports
will help Ukraine diversify its sources of supply and
reduce its reliance on Russian coal.
Budget and Cabinet Choices Reflect Trump
Priorities
Part of President Trumps plan to undo federal
regulations and incentivize fossil fuel production
includes reducing or eliminating funding for
environmental and climate programs. Trump has
proposed to cut, and in many cases completely
defund, environmental initiatives housed in the EPA,
31 Ari Nattter, Ukraine Coal Exports Part of Trump Bid to Counter
Russia, Bloomberg, July 31 2017, https://www.bloomberg.com/
news/articles/2017-07-31/ukraine-coal-exports-part-of-trump-
bid-to-counter-russian-energy.
32 Mathew Daley, Trump administration hails deal to export coal
to Ukraine, Washington Post, July 31 2017, https://www.wash-
ingtonpost.com/politics/trump-administration-hails-deal-to-
export-coal-to-ukraine/2017/07/31/34839d78-760f-11e7-8c17-
533c52b2f014_story.html?utm_term=.0d86ee24799b.
7
 ISSU E B RIEF The America First Energy Plan
Map 1. US Shale Oil and Gas Basins
Source: SVB Energy International.
Map 3. US Coal Basins
Source: SVB Energy International.
Department of Energy (DOE), and Department of
State (DOS).
Trumps budget for the EPA calls for limiting or
discontinuing the Clean Power Plan, clean air programs,
and international research programs and partnerships
for climate change. Trumps proposed budget plan
would slash DOS funding of the Global Climate Change
Initiative and end payments to the United Nations
Climate Change Program. 33 Proposed cuts to DOE
would hit the Office of Energy Efficiency and Renewable
Energy and the Advanced Research Projects Agency -
Energy particularly hard. 34 Although Trumps budget
33 Hiroko Tabuchi, Whats at Stake in Trumps Proposed EPA
Cuts, New York Times, April 10, 2017, https://www.nytimes.
com/2017/04/10/climate/trump-epa-budget-cuts.html.
34 Brad Plumer, Looking for Trumps Climate Policy? Try the
Energy Department, New York Times, May 25, 2017, https://
8 ATLANTIC COUNCIL
Map 2. US Major Fossil Fuel Producers
Source: SVB Energy International.
proposal stands little chance in Congress, it indicates
his priorities, and he is likely to see some substantially
moderated version pass with Republican majorities in
both chambers.
President Trumps cabinet picks further signal a focus
on energy production at the expense of environmental
protection. The EPA administrator, Scott Pruitt, has a
history of conflict with the core principles of the agency
he overseesPruitt sued the EPA at least fourteen times
while serving as the attorney general of Oklahoma. 35
The appointment of former Texas Governor Rick Perry
as the secretary of energy and former ExxonMobil
CEO Rex Tillerson as head of the State Department
further emphasize the new administrations focus on
increasing fossil fuel production and lowering prices
for consumers.
Political Pressures to Deliver on Campaign
Promises
Todays low energy prices partially explain Trumps
proposed reversal of US energy policy. The oil and gas
glut and persistent low prices have hurt some fossil fuel
producing regions. Higher prices, regulatory changes,
and the psychological boost of the presidents rhetoric
could encourage domestic fossil fuel investment,
particularly in lower-cost shale plays.
www.nytimes.com/2017/05/25/climate/energy-department-cli-
mate-trump-budget.html?mcubz=2.
35 Robinson Meyer, Trumps EPA Pick Is Poised to Slide Past a
Lawsuit into Office, The Atlantic, February 15, 2017, https://www.
theatlantic.com/science/archive/2017/02/progressives-will-re-
gret-not-doing-more-to-oppose-scott-pruitt/516840/.
 ISSU E B RIEF The America First Energy Plan
Any impact on oil, gas,
and coal producers from
Trumps policy proposals
will be felt most strongly
and most immediately
by many members of the
Republican base.
Any impact on oil, gas, and coal producers from Trumps
policy proposals will be felt most strongly and most
immediately by many members of the Republican base.
Fossil fuel production is overwhelmingly concentrated
in stalwart conservative strongholds that supported
Trump in 2016 and sent Republican representatives
to Congress. Many of these communities rise and
fall with the price of oil, gas, and coal. In Williston,
North Dakotaone of the more extreme examples
the Trump administrations decision to authorize
the Keystone pipeline sparked a night of fireworks
and celebration, as Facebook CEO Mark Zuckerberg
recounted recently. 36
Natural gas production, which reached a record high
of twenty-seven trillion cubic feet in 2015, 37 is heavily
concentrated in states that supported Trump in 2016.
Five statesTexas, Pennsylvania, Oklahoma, Wyoming,
and Louisianaaccounted for 65 percent of total US
dry natural gas production in 2015, 38 all five of which
are traditional Republican strongholds and backed
Trump in 2016.
Following years of decline from 1985 to 2008, domestic
oil production has since been on the rise, particularly
in Texas, North Dakota, and Oklahoma. However,
due to persistently low global prices, production fell
from 9,415 million barrels per day (mb/d) in 2015 to
8,874 mb/d in 2016. 39 This slump, and the associated
36 Mark Zuckerberg, Facebook Post, July 12, 2017, at 01:47
a.m. Eastern Time, https://www.facebook.com/zuck/
posts/10103877842160021.
37 Natural Gas Gross Withdrawals and Production, US Energy
Information Administration, release date June 30, 2017, https://
www.eia.gov/dnav/ng/NG_PROD_SUM_DC_NUS_MMCF_A.htm.
38 Natural Gas Explained: Where Our Natural Gas Comes From, US En-
ergy Information Administration, last updated January 10, 2017, https://
www.eia.gov/energyexplained/index.cfm?page=natural_gas_where.
39 US Coal Production, 2010 2016, US Energy Information Ad-
ministration, https://www.eia.gov/coal/production/quarterly/pdf/
t1p01p1.pdf.
ATLANTIC COUNCIL
Figure 1. US Natural Gas Output (2015)
26%
Other
35%
Louisiana
Wyoming
Oklahoma
Pennsylvania
Texas
6% 18%
6%
9%
Source: Natural Gas Gross Withdrawals and Production, US Energy
Information Administration, release date June 30, 2017, https://www.
eia.gov/dnav/ng/NG_PROD_SUM_DC_NUS_MMCF_M.htm.
thousands of layoffs due to falling production, hit these
states particularly hard. While these states traditionally
support Republican candidates, Trumps energy policy
promises to ease regulatory requirements could have
added to his popularity.
While the 2016 downturn is an anomaly in the otherwise
positive nearly decade-long resurgence in domestic
oil and gas production, coals fortune has been on
the decline over the same period. The decline in coal
production has lasted longer and hit harder compared
with oil and natural gasproduction fell from 1 billion
tons in 2014 to nearly 897 million tons in 2015.40
While about half of US states produce appreciable
quantities of coal, 70 percent of production comes
from five states: Wyoming, West Virginia, Kentucky,
Pennsylvania, and Illinois. All but Illinois went
for Trump,41 with historically Democratic-leaning
Pennsylvania giving Trump a stunningthough slim
victory, thanks largely to white supporters in rural
regions.42 Failure to follow through on his promise to
achieve an increase in coal production could hurt his
slender margins in Pennsylvania.
40 US Energy Information Administration, Annual Coal Report 2015,
November 2016, https://www.eia.gov/coal/annual/pdf/acr.pdf, 4.
41 Coal: Explained: Where Our Coal Comes From, US Energy
Information Administration, last updated April 24, 2017, https://
www.eia.gov/energyexplained/index.cfm?page=coal_where.
42 Salena Zito, Why Democrats in Western Pennsylvania Are Vot-
ing Trump, The Atlantic, September 13, 2016, https://www.the-
atlantic.com/politics/archive/2016/09/why-democrats-in-west-
ern-pennsylvania-are-voting-trump/499577/; Pennsylvania
Results, New York Times, February 10, 2017, https://www.
nytimes.com/elections/results/pennsylvania.
9
 ISSU E B RIEF The America First Energy Plan

Figure 2. US Crude Oil Output (2015) Figure 3. US Coal Output (2015)

37% Other 29% Other

35%
40%
Oklahoma Illinois

Alaska Pennsylvania

California Kentucky

North Dakota West Virginia

6%
Texas Wyoming
5% 6%
5% 12%
6% 8% 11%
Source: US Crude Oil Production, US Energy Information Admin- Source: US Coal Production, 2010 2016, The US Energy Informa-
istration, release date June 30, 2017, https://www.eia.gov/dnav/pet/ tion Administration, https://www.eia.gov/coal/production/quarterly/
pet_crd_crpdn_adc_mbblpd_a.htm. pdf/t1p01p1.pdf.

Conclusion However, President Trumps energy policy proposals

President Trump aims to change the direction of ultimately contain an inherent contradiction that further
US energy policy. The America First Energy Plan imperils their success. If he successfully presides over
emphasizes developing and extracting domestic an expansion in fossil fuel production and an ensuing
low-cost resources and creating jobs, while scaling reduction in consumer prices, as he has promised, the
down or ending Obama administration investments in resulting lower prices would subsequently drive high-
environmental and climate programs. cost producers from the market and once again erode
profits. This basic supply and demand constraint would
Nevertheless, Trumps energy plans still face daunting ultimately undermine his ambition to create American
challenges, particularly his promises to revive the coal energy jobs and achieve long-term production
industry. Some Republican senators and industry increases.
executives have cautioned Trump to temper his
Sara Vakhshouri is senior energy fellow at the Atlantic
promises and rhetoric, as the economics of coal
Councils Global Energy Center and president of SVB
are difficult, including the economics of clean coal
Energy International, a Washington, DCbased energy
powered plants, which are extremely uncompetitive consulting firm.
and disadvantageous at a time of secure, cheap, and
abundant natural gas. The author would especially like to thank George David
Banks, special assistant to the president for International
Despite the obstacles, Trumps presidency has Energy and Environment, David Goldwyn, Ellen Scholl,
generated great optimism and hope in an industry that and Randy Bell of the Atlantic Councils Global Energy
has suffered due to low oil prices and an increasingly Center for their valuable feedback.
difficult political environment due in part to increasing
Also thanks to Joseph Long of SVB Energy International,
momentum for policies to combat climate change.
LLC for his wonderful drafting, research, and editorial
The Trump administration will create a more favorable
support.
environment for increasing domestic oil and gas
production. As Pioneers CEO stated, relaxed regulatory
rules and greater support for fossil fuels from the
administration and Congress will help producers focus
on production. A more favorable regulatory climate
for producers with the potential for higher investment
returns could encourage international investment in US
oil and gas fields, although thermal coal is unlikely to
see the same growth.

10 ATLANTIC COUNCIL
 Atlantic Council Board of Directors

CHAIRMAN Michael Calvey Lawrence S. Kanarek Robert O. Rowland

*Jon M. Huntsman, Jr. James E. Cartwright Stephen R. Kappes Harry Sachinis
CHAIRMAN EMERITUS, John E. Chapoton *Maria Pica Karp Brent Scowcroft
INTERNATIONAL Ahmed Charai *Zalmay M. Khalilzad Rajiv Shah
ADVISORY BOARD Sandra Charles Robert M. Kimmitt Stephen Shapiro
Brent Scowcroft Melanie Chen Henry A. Kissinger Kris Singh
Michael Chertoff Franklin D. Kramer James G. Stavridis
PRESIDENT AND CEO
George Chopivsky Richard L. Lawson Richard J.A. Steele
*Frederick Kempe
Wesley K. Clark *Jan M. Lodal Paula Stern
EXECUTIVE VICE CHAIRS David W. Craig *Jane Holl Lute Robert J. Stevens
*Adrienne Arsht *Ralph D. Crosby, Jr. William J. Lynn Robert L. Stout, Jr.
*Stephen J. Hadley Nelson W. Cunningham Izzat Majeed John S. Tanner
VICE CHAIRS Ivo H. Daalder Wendy W. Makins *Ellen O. Tauscher
*Robert J. Abernethy Ankit N. Desai Zaza Mamulaishvili Nathan D. Tibbits
*Richard W. Edelman *Paula J. Dobriansky Mian M. Mansha Frances M. Townsend
*C. Boyden Gray Christopher J. Dodd Gerardo Mato Clyde C. Tuggle
*George Lund Conrado Dornier William E. Mayer Paul Twomey
*Virginia A. Mulberger Thomas J. Egan, Jr. T. Allan McArtor Melanne Verveer
*W. DeVier Pierson *Stuart E. Eizenstat John M. McHugh Enzo Viscusi
*John J. Studzinski Thomas R. Eldridge Eric D.K. Melby Charles F. Wald
Julie Finley Franklin C. Miller Michael F. Walsh
TREASURER
Lawrence P. Fisher, II James N. Miller Maciej Witucki
*Brian C. McK. Henderson
*Alan H. Fleischmann Judith A. Miller Neal S. Wolin
SECRETARY *Ronald M. Freeman *Alexander V. Mirtchev Mary C. Yates
*Walter B. Slocombe Laurie S. Fulton Susan Molinari Dov S. Zakheim
DIRECTORS Courtney Geduldig Michael J. Morell
HONORARY DIRECTORS
Stphane Abrial *Robert S. Gelbard Richard Morningstar
David C. Acheson
Odeh Aburdene Thomas H. Glocer Georgette Mosbacher Madeleine K. Albright
*Peter Ackerman Sherri W. Goodman Thomas R. Nides James A. Baker, III
Timothy D. Adams Mikael Hagstrm Franco Nuschese Harold Brown
Bertrand-Marc Allen Ian Hague Joseph S. Nye Frank C. Carlucci, III
John R. Allen Amir A. Handjani Hilda Ochoa-Brillembourg Ashton B. Carter
*Michael Andersson John D. Harris, II Sean C. OKeefe Robert M. Gates
Michael S. Ansari Frank Haun Ahmet M. Oren Michael G. Mullen
Richard L. Armitage Michael V. Hayden Sally A. Painter Leon E. Panetta
David D. Aufhauser Annette Heuser *Ana I. Palacio William J. Perry
Elizabeth F. Bagley Ed Holland Carlos Pascual Colin L. Powell
*Rafic A. Bizri *Karl V. Hopkins Alan Pellegrini Condoleezza Rice
Dennis C. Blair Robert D. Hormats David H. Petraeus Edward L. Rowny
*Thomas L. Blair Miroslav Hornak Thomas R. Pickering George P. Shultz
Philip M. Breedlove *Mary L. Howell Daniel B. Poneman Horst Teltschik
Reuben E. Brigety II Wolfgang F. Ischinger Daniel M. Price John W. Warner
Myron Brilliant Deborah Lee James Arnold L. Punaro William H. Webster
*Esther Brimmer Reuben Jeffery, III Robert Rangel
R. Nicholas Burns Joia M. Johnson Thomas J. Ridge *Executive Committee Members
*James L. Jones, Jr. Charles O. Rossotti List as of July 25, 2017
*Richard R. Burt
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